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Last year I sold a company that I’d owned for nearly 10 years. Just after the sale of this business I made a list of all the lessons I’d learned while owner and all the useful business insights. I came up with 15 significant lessons learned. For the next few weeks I’m going to cover a 5 lessons I learned each week. Here are this weeks lessons:
Lesson one for me, was begin with the end in mind. When I started the business I never thought I’d leave. I loved the company, I loved my business partners and I loved our clients. I knew that we were providing a valuable service to our clients and to the community. I loved the work I did which was primarily marketing, sales and event planning. I never thought I’d want to leave and then one day I did and I didn’t have a plan. My business coach had said many time that we needed an exit strategy, but for some reason I just didn’t believe him. I was able to sell the company and it all worked out great, but it would have been much better if I’d had a plan from the start.
Profit is key
Lesson two was profit is key. There were many years when we were able to pay our bills, our employees and ourselves, but there was no profit. I didn’t fully understand why profit was so important. I wasn’t thinking of the organization and entity outside of the owners. Of course I knew that making money was important, but I didn’t realize just how important it was until we lost money. We put together a product, a high end product and it was a great package, but at the end of the year it lost money. The hardest part? We were nearly sold out of the high end product. Our sales team had done a great job selling it and our marketing team had done a fabulous job with execution, but I as the owner had done a very poor job pricing the product correctly. At the end of the year, we lost money. Profit is important.
What you track will grow
If you aren’t tracking the activities in your business you are missing a great opportunity to take your business to the next level. By creating a weekly dashboard that tracked our progress we were able to easily see where our strengths and weaknesses lie. We could see if we were making enough sales calls, if we were closing enough sales, if we had sold the right products at the right time to allow the company to function well. If you don’t track your activities such as sales calls, sales closed, cash in, number of products sold, average dollar sale, you are missing out on a great opportunity to really grow your business. What get’s measured gets managed. Plan and simple. Make it a priority.
Outsourcing and delegation presented a steep learning curve
As an owner of the business I was certain I could do all things and do them well. I knew how to do what I wanted to do and when it should be completed. Doesn’t it always take so much longer to teach someone else how to do something? Isn’t it much better to just do it and be done with it? I learned that the first time you do something it is easier to just do it yourself. Teaching and training are time consuming. However, in the long run if you train the right person you are much more successful delegating and outsourcing because it does save loads of time and allows your company to step up to the next level of revenue growth. If you are building a business and not just a job for yourself you need others to help you grow your organization. Outsourcing can save time and money. If you outsource the right items, your work flow can be streamlined and accomplished often cheaper in less time.
Have clear job descriptions and roles
If you’ve not read the E-myth Revisited, you need to go buy a copy. Think about your company and what it takes to run your business. Then write a very clear job description for each job that is to be completed. Even if you don’t have any one person assigned to that task at present, write the job description. As you grow you will eventually hire people to fill those roles. Being crystal clear about who does what when and for what reason is the difference between a successful smooth running organization and a chaotic mess. If someone walks into your business and asks an employee what role they play and what tasks they are responsible for, the employee should be able to answer seamlessly. Each person in your organization plays an important role in the success of the business. Make sure everyone knows what role that is and why it is vital to your organization.
These are the first five lessons I learned. Check out next week’s post for more great lessons learned.